Credit Report vs. Credit Score

All this credit stuff can get pretty complicated in a hurry.

But two things you should have a handle on are credit reports and credit scores. Each are important in their own right, and both are necessary to assess your overall standing as a borrower.

While the pair certainly overlap, they are two entirely different things.

Credit Reports

A credit report contains a wealth of information about you, including basics like your name, address, social security number, and employment history.

Additionally, your credit report will detail your credit history, with information on the types of accounts you’ve got open, how long they’ve been established, what their associated balances are, and if they’re current or derogatory (collections, charge-offs).

Any recent credit inquiries will also show up on a credit report so creditors can determine if you’ve been shopping around for new credit. This can alert them if you’ve recently gone “credit crazy,” which can boost your chances of default.

And while all this information can be very helpful to both consumers and creditors looking to determine creditworthiness, both parties seem to be most interested in credit scores.

Credit Scores

A credit score is simply a three-digit number between 300-850 (credit score range) for Fico scores, and a number between 501-990 for VantageScore. It’s a numerical representation of your credit default risk, based on the aforementioned information found in your credit report.

Think of it this way.  A credit score is your “grade” based on what’s found in your credit report.  Similar to a paper you would write in school, you are assigned a grade.  And often people are more concerned with that grade than what’s behind it.

So if you’ve got a lot of good information on your credit report, your associated credit score should be high to reflect that. The opposite is also true. If there’s lots of bad stuff in your credit report, your credit score will be poor to reflect that.

Generally, a fully loaded credit report will contain three credit scores, one for each of the main credit bureaus. These credit scores are derived from the information found in your credit report.

Without all that information, you wouldn’t have a credit score, so the two can’t really exist without one other. In fact, those who do not have credit scores don’t have sufficient credit history on their credit report to generate a credit score.

Tip: If you order a free credit report from the official AnnualCreditReport.com, don’t expect to receive a credit score. They are not included, and can only be purchased for an additional fee, typically to the tune of $10 or more per score. Expect to get numerous offers to purchase your credit score for an additional fee after you pull your credit report…

If you want a free credit score, consider enrolling in a trial credit monitoring program and canceling before incurring any charges. This is the best way to get your credit scores without paying a dime.

Just remember that you need both your credit report and credit scores to properly assess your creditworthiness.